Larimer approves water sharing agreement with Broomfield to keep farm in production

By Pamela Johnson

Reporter-Herald Staff Writer

Posted:
08/01/2017 03:19:47 PM MDT

Larimer County approved a water sharing agreement with the city and county of Broomfield on Tuesday, Aug. 1, 2017, to keep this farm located southwest of Berthoud near the Little Thompson River in production. The Malchow family farmed the land for decades before selling the farm and its water to the Larimer County Department of Natural Resources last year to protect its history and agricultural usage. (Charlie Johnson / Larimer County)

FORT COLLINS — Larimer County is leading the state with the first perpetual water sharing agreement that keeps a farm in production and provides water for municipal use.

"This is a great new idea, and it's going to allow us to have a greater hand in making sure agricultural land stays in production," Commissioner Tom Donnelly said shortly before the elected commissioners approved the water agreement 3-0 on Tuesday.

"This is the first step in exciting work that can be done for years to come."

Following the lead of citizens who, in recent public outreach, expressed an interest in the county preserving agriculture and water, the Larimer County Department of Natural Resources spent $8.4 million in 2016 to buy the Malchow family farm and its associated water. The county is now calling the land the Little Thompson Farm because of its proximity to the river of that name.

The goal was to preserve the land as a working farm and to offset the cost of doing so with a water-sharing agreement, which is also a method the Colorado Water Plan endorses to stop simple "buy and dry" of farmland by municipalities that need the water to handle growth.

Extensive negotiations and studies by experts in agriculture, finance and water led to partnership agreement between Larimer County and the city and county of Broomfield. Experts made sure the farm could stay viable under the agreement by looking at water supply, economics and historic weather patterns.

That agreement, which was approved by Larimer County on Tuesday, basically sells Broomfield 115 shares of the farm's Colorado-Big Thompson water outright, allows the municipality to use another 80 during three dry years out of every 10, and preserves 45 shares for the farm use.

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The water that will stay on the farm — a mix of Colorado-Big Thompson and additional shares of Handy Ditch water — will be enough to keep the farm profitable and in production, growing corn and sugar beets in wet years and dryland crops in dry years, according to information from extensive studies.

For its part of the agreement, Broomfield will pay the county $3.7 million for the water. The price includes paying market value for the 115 shares that it will buy outright and 40 percent of market value for the 80 units that it can use only three out of every 10 years.

"It's like a time share," said Commissioner Steve Johnson. "They only get it for 30 percent of the time. They're not going to pay the whole price of the house because they can only live in it 30 percent of the time."

Yet, they agreed to pay 40 percent instead of 30 percent to ensure the water supply when needed, noted Kerri Rollins, the county's open lands director.

The municipality will be able to pull the 80 units of water in three dry years out of every 10, and the rest of the time, the water will remain on the farm to irrigate crops. During the years that the water leaves the farm, Broomfield agreed reimburse the farmer that is leasing the land from the county the cost of that farm lease to help keep the farm profitable in dry years.

Under the agreement, Larimer County will receive another $100,000 from a grant from the Gates Family Foundation and $52,750 from the Colorado Water Conservation Board.

This type of water sharing agreement is encouraged by the Colorado Water Plan as a way to protect farmland from the typical "buy and dry" that is occurring with growing municipal need across Colorado.

In fact, Larimer County officials noted that if the Malchow family had not wanted to sell to Larimer County to keep their family farm in production, buyers were lined up to pay top dollar just for the water.

"This water would be in the hands of a municipality right now if not for Larimer County and this plan that has been in the works for several years and this family who could have sold this property," Donnelly said.

A team of experts looked at historic weather data, financial models and water supply to determine if the farm could stay viable under this agreement, and deemed that it could.

With this model in place, Larimer County and state water officials hope this agreement, the first of its kind in the state, will result in more farmers and cities following suit instead of simply selling the water and taking the land out of production.

"We've seen what happens if we don't do something like this," Johnson said.

"The state's water plan calls for innovative solutions like this. I'm very proud that Larimer County is the first entity to produce an agreement like this that allows us to keep water on a farm."

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